ADIB 2017 net profit rises 17.7 per cent

Abu Dhabi Islamic Bank (ADIB) has reported a record net profit of AED 2.3 billion for the year ended 31 December 2017, up 17.7 per cent from 2016, driven by higher income from fees, foreign exchange, investments and reduction in cost of credit.

Revenue increased by 4.6 per cent to AED 5.6 billion, while the bank also benefited from lower credit provisions and impairments in 2017 decreasing by 18.5 per cent from a year earlier.

The Board of Directors has recommended the distribution of 28.87 per cent cash dividend for 2017. The cash dividends represent 39.76 per cent of full year net profit for 2017.

Group Financial Highlights for FYR 2017 include:

Group net profit increased by 17.7 per cent Y-O-Y to AED 2,300.1 million vs. AED 1,953.6 million in 2016.

Group net revenues increased by 4.6 per cent Y-O-Y to AED 5,632.3 million vs. AED 5,385.5 million in 2016.

Credit provisions and impairments decreased by 18.5 per cent Y-O-Y to AED 790.4 million vs. AED 970.0 million in 2016.

Total assets at AED 123.3 billion, up 0.8 per cent from AED 122.3 billion at the end of 2016 and an increase of 1.7 per cent from AED 121.3 billion at 30 September 2017.

Net customer financing decreased by 2.1 per cent to AED 76.5 billion, from AED 78.2 billion at the end of 2016 and decreased 0.4 per cent from AED 76.8 billion at 30 September 2017.

Customer deposits grew 1.2 per cent to AED 100.0 billion, from AED 98.8 billion at the end of 2016, an increase of 0.9 per cent from AED 99.1 billion at 30 September 2017.

The capital adequacy ratio under Basel II at 31 December 2017 is 16.71 per cent vs 15.25 per cent at 31 December 2016.

The capital adequacy ratio under Basel III is at 17.02 per cent at 31 December 2017.

ADIB remains one of the most liquid banks in the UAE, with an advances-to-stable funds ratio (a regulatory ratio) of 80 per cent at 31 December 2017, vs. 85.1 per cent at 31 December 2016 and an advances to deposits ratio of 76.5 per cent at 31 December 2017, vs. 79.1 per cent at 31 December 2016.

Non-performing assets ratio stood at 5.4 per cent with non-performing assets totalling AED 4,299.1 million at 31 December 2017.

“We had a great year in 2017, with net profit rising nearly 18 per cent to AED 2.3 billion. ADIB experienced robust growth across our businesses, while we maintained a disciplined approach to cost and risk management. During the year, we welcomed approximately 62,000 new customers with a strong offering of products and services, easily accessed through digital platforms. The solid performance has permitted ADIB’s Board of Directors to recommend a cash dividend payout of 39.76 per cent of the year’s net profit, while still allowing for continued significant reinvestment in the future growth of our businesses Khamis Buharoon, ADIB Vice Chairman and acting CEO," said Khamis Buharoon, ADIB Vice Chairman and acting CEO.

He added that despite heavy investment in advancing digital capabilities, the bank demonstrated a strong expense discipline with the cost-to-income ratio decreasing by one per cent when compared to 2016. This is in line with management targets and it will enable the bank to invest further in future growth.

“It is pleasing to note that the stabilisation of the business environment, together with our focus on asset quality, has led to higher recoveries and an 18.5 per cent decrease in impairment allowances from last year. ADIB has always been at the forefront of banks in the UAE when it comes to capital management with a capital adequacy ratio under Basel II of 16.71 per cent. Capital adequacy ratio under Basel III is 17.02 per cent, which is also above the minimum regulatory thresholds advised by Central Bank of the UAE. We therefore fully expect to be able to support our continued growth in the most effective and efficient manner,” he said.

Buharoon added that looking ahead, ADIB is well positioned to take advantage of the opportunities that are expected to arise from the positive economic outlook of the UAE, and that the bank’s financial strength and focus on leveraging innovation and providing a high-quality banking experience will help attract more customers and deliver long-term shareholder value.